Hi Lindsey, I have spent much of the last ten years managing Australian wineries sales both domestically and internationally. At Charles Melton Wines we only make a limited amount of wine each year and sell out of each vintage so do not experience the issues that a lot of Aussie wineries are currently facing. Below I have put together a bit of an overview of the market.
1. How do you feel about Australia's current wine market?
There has been a real consolidation in the Australian market in the past few years. Producers have had to change their production to suit the demands of the market both domestically and internationally. I feel as though as an industry we are starting to get the mix in balance.(supply versus demand) A few low yielding vintages have also helped in not leaving us with too much of a surplus as an industry. Our domestically market has travelled well and some emerging export markets have really helped the industry.
2. How many cases do you produce annually?
Average approximately 15,000 cases per annum.
3. About what percentage of your wine is exported?
Approximately 30-35%.
4. Which countries do you choose to export to and why?
We have traditionally exported to the UK, Ireland, Canada and USA as did most Australian wineries in the past. The exchange rate with a weak Aussie dollar was our advantage as a country when we were developing these export markets. Sales were strong when our currency was weak in comparison to theirs. The rapid increase in the Australian Dollar compared to the USD, Canadian dollar, Euro and Pound has made Australian wines a lot more expensive in these countries. Here's an example of the rise in the Aussie dollar compared to these export markets. Highlighting the exchange rate towards the end of 2008 compared to what it is today and showing you the increase in the Aust dollar. US Dollar now $1.05 Oct 08 .64 64% increase UK Pound now .68 Oct 08 .39 74% increase Can Dollar now 1.06 Oct 08 .78 36% increase Euro now .8085 Oct 08 .48 65% increase This has meant that we have also lost our competitive advantage against producers that trade and operate with USD, English pound and Euro. (eg. Spain, Italy, France, South America.) Therefore most Aussie brands have needed to support the exchange rate increase by lowering their prices during the last few years to maintain market position. Emerging markets with a strong currency similar to the Aussie dollar have therefore come into play the last few years. Eg. Asia/Russia. The Aussie domestic market has travelled pretty well during this time which has kept many wineries afloat but there is definitely an increase threat from imports due to the competitive advantage they now have importing into our country. Plus their lower costs of production. Staff, taxes, shipping etc. Consumers are far more conservative when it comes to high end wines with the increase reporting of doom and gloom for the world economy and the possibility of Australia experiencing the recession that much of the world has experienced since 2008.
5. How would you compare Australia's wine market to California?
Very hard question. Both countries have a wide range of producers from high volume, low priced wineries to small volume, super premium wineries. Both countries have quite loyal domestic markets. California would be experiencing the advantage of a low US dollar for their export markets at the moment. The premium regions in both countries should still be travelling pretty well due to the limited nature of their production. Feel free to send me an email or give me a call if you have any further questions and good luck with your studies? Regards, Sam
No comments:
Post a Comment